Global Corruption Report: Climate Change
By Bhavani Prakash
One of the so-called “successes” of the COP16 Climate Summit at Cancun, Mexico last year was the proposed $30 billion annual payment from developed countries to developing one from 2010 to 2012 which will be upped to US $100 billion annually by 2020 – a flow that is meant for mitigation and adaptation of climate change.
Absolute figures mean very little, so let’s put this in context.
The US financial bailout which at the outset cost US $700 billion, kept adding up to what is estimated to be a commitment of US $12.2 trillion. Remember the alacrity with which this money was taken out of thin air? Well, not exactly thin air, but from taxpayer’s pockets.
And not to forget – world military spending is 2.6% of GDP reaching US 1.6 trillion in 2010. The US $100 billion promised to developing countries is only about 8% of total global military spending and very inadequate. The developed world actually spends far higher on military – the US for example, military expenditure is 20% of its GDP!
According to The World’s People’s Conference on Climate Change and the Rights of Mother Earth which was held in Cochabamba, Bolivia, April 19-22 2010 as an alternative to the Copenhagen Summit held in December 2009:
“Developed country parties must commit at least 6% of their annual GDP for climate finance in developing countries. The viability of mobilising this amount of finance is evident – developed countries spend an equivalent amount each year on national defence. In addition, developed countries have mobilised trillions of dollars (equivalent to five times the 6% GDP proposed) to bail out failed banks and speculators. This is a question of political will, and the priority given to effectively combating climate change and protecting Mother Earth.”
How much will it cost to avert climate change?
Sir Nicholas Stern, the author of the famous report “The Stern Review on the Economics of Climate Change” estimates the cost of tackling climate change to be about 2% of GDP annually. A simple back-of-the-envelope calculation tells us that with a global GDP of about US $58 trillion, it would take about US 1 to US 1.5 trillion a year at current prices for the world every year to deal with climate change. The world’s investment in renewables is only about US$ 243 billion in 2010.
Stern also went on to point out that taking no action is a foolhardy choice – one that could cost the world a startling 5% to 20% of GDP.
If the US $100 billion annual payment to developing countries is a pittance (and there’s no mention of whether this will be inflation-adjusted), there’s further concern that this may trickle down to even less, given that most of these countries to whom the funds are being directed, have very poor governance systems. In other words, they have high levels of corruption.
Transparency International(TI), the global civil society organisation leading the fight against corruption, highlights this concern in their latest report entitled The Global Corruption Report: Climate Change as summarised in the following video:
Video link here
According to their Press Release:
As governments prepare to spend up to US$100 billion annually by 2020 to limit climate change and prepare for its impact, Transparency International (TI) warns of the corruption risks of climate finance flowing through new, untested channels and recommends strengthening governance systems to tackle them.
The Global Corruption Report: Climate Change sets out practical guidelines to prevent corruption undermining climate change measures and calls on governments, international organisations, businesses and civil society to ensure good governance in climate policy.
“The urgent need to respond to climate change needs to be enhanced by transparency and accountability. Oversight must be built into all climate-related initiatives from the start,” said Huguette Labelle, chair of Transparency International. “Good governance now will help ensure the success of the impact of climate change policy and funding.”
“Bangladesh is at the frontline in the battle to combat climate change. How Bangladesh manages climate governance and ensures transparency and accountability in the use of climate change funds can provide lessons for governments and civil society around the world. The recommendations in the report come at a critical time,” says Iftekhar Zaman, executive director of Transparency International Bangladesh.
Under global climate agreements, substantial new funding from governments and multilateral agencies will be made available to finance mitigation of climate change, such as renewable energy projects like wind farms or solar power plants, and adaptation to it, such as constructions of sea walls, irrigations systems and disaster-ready housing.
None of the 20 countries expected to be most affected by climate change – where much of this money will be spent – scores higher than 3.6 on the TI’s Corruption Perceptions Index, in which 0 indicates perception of extremely corrupt and 10 is very clean. Governments must ensure transparent oversight of how climate change funds are spent, which can be enhanced by civil society monitoring.
The report combines analysis from more than 50 leading climate change experts from 20 countries tackling a wide range of issues including:
- the politics of climate change and accountability of funding institutions
- the role of the private sector
- the integrity of carbon markets
- the response to climate change impacts in developing countries (climate-proofing infrastructure, preparing for climate migration and improving disaster management)
- Forestry governance
- Public participation and transparent oversight
The report recommends greater public participation, access to information and accountability to make climate governance more effective. This would limit the potential for conflicts of interest in decision-making and the negative effects that lobbying and special interests can play in setting climate policy.
The report warns of the risk of a green resource curse. New technologies needed to replace fossil fuels, such as solar panels, require different natural resources. It is important that the mining industry that exploits these resources is transparent and publicly discloses payments to governments so that citizens can ensure the proceeds are used for their benefits.
Similarly, governments that sell land for bio-fuel cultivation, estimated to be 10 per cent of transport fuels in many of the world’s leading economies by 2030, must allow for public participation and oversight so that local communities’ land rights are respected.
Keeping forests clean and green
US$28 billion of climate financing is expected to flow annually to countries with large tropical forests to discourage deforestation and preserve this form of natural carbon storage. Illegal logging, worth more than US$10 billion a year, is already fuelled by corruption of customs and land management authorities. The report highlights that some governments have already claimed credits for fictitious forest plantation projects.
Case studies from Austria, Bangladesh, Bolivia, Columbia, Kenya, Philippines, Spain, and the United States illustrate the global dimension of the climate change challenges facing the planet.
“Corruption holds nothing sacred, not even our planet’s future. Failure to properly govern climate change measures now will not only lead to misallocated resources and fraudulent projects today, but also hurts future generations,” said Labelle.
Further links you may be interested in:
2.SDUpdate: How should we spend 100 billion USD per year sensibly? This article discusses other likely pitfalls in the disbursement of this funds.
3.Guardian UK: Does Cancun show climate leadership?
5.YouTube: Al Jazeera: Inside Story – Global Corruption
Video link here
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